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Decision Analysis ZG535: BITS Pilani

This document provides an introduction to decision analysis. It discusses some common myths about decision making, including that decisions are only made by executives, the process is always linear, and emotions don't influence outcomes. It also outlines descriptive and normative approaches to decision making. The rest of the document discusses factors that influence decisions, what constitutes a decision, different perspectives on what makes a "good" decision, and how outcomes can influence perceptions of decision quality.

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SHAIKH MOHAMMED RAFI OMAR
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144 views9 pages

Decision Analysis ZG535: BITS Pilani

This document provides an introduction to decision analysis. It discusses some common myths about decision making, including that decisions are only made by executives, the process is always linear, and emotions don't influence outcomes. It also outlines descriptive and normative approaches to decision making. The rest of the document discusses factors that influence decisions, what constitutes a decision, different perspectives on what makes a "good" decision, and how outcomes can influence perceptions of decision quality.

Uploaded by

SHAIKH MOHAMMED RAFI OMAR
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Introduction to Decision Analysis, BITS Pilani

BITS Pilani
Pilani Campus

Decision Analysis ZG535


The premise
Lecture 2
Introduction to Decision Analysis, BITS Pilani

Myths

• Decisions are made in boardrooms - Tacit knowledge


• Decision making follows a linear pattern - Know what you don’t know
• We make good decisions when we are not influenced by emotions -
Phineas P. Gage case
• Smart people make good decisions - Brilliant Blunders

2
Introduction to Decision Analysis, BITS Pilani

The way we decide The way we think we


should decide
Descriptive Normative
Introduction to Decision Analysis, BITS Pilani

1
Thought 4 Action 3
2
Introduction to Decision Analysis, BITS Pilani

Personality 1. Speed
Preferences

2. Comfort
External factors 3. Cost
1. Rush
2. Traffic

Decision

Alternatives Values,
Resources
1. Public transport
2. Bike
3. Car

Introduction to Decision Analysis, BITS Pilani

A decision can be defined as a ‘choice’ between two or


more ‘alternatives’ that involves an ‘irrevocable’
allocation of ‘resources’ A mental commitment or
intention is not a decision

Resource Decision
Intent
commit
Introduction to Decision Analysis, BITS Pilani

A decision that gets the expected outcome is a good decision – Statistician's


1
world.

A decision that gets the highest favourable outcome is a good decision –


2
Politician’s world.

A decision that beats the competition and helps lead the market is a good
3
decision – Strategists’ world.

4 A decision that is rationally taken is a good decision – Westerners’ world.

5 There is nothing called good or bad – A scientist’s world.

6 Sorry, I am confused – An engineer’s world.

I have written a best selling book that is794 pages, please read it – A
7
philosopher’s world.
Introduction to Decision Analysis, BITS Pilani

Reach home He is
Stay back
safe fortunate
Quality of
Decision Quality of
Drive under MeetOutcome
with an
influence accident Bad luck
Introduction to Decision Analysis, BITS Pilani

Is this not counter intuitive?

Should we not be looking at the result


while making a decision?

Have you or others judged


your decision based on its outcome?

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